Home Foreign UNITED KINGDOM-AFRICA TRADE SUMMIT – AN OPPORTUNITY FOR AFRICA’S LEADERS TO ASK...

UNITED KINGDOM-AFRICA TRADE SUMMIT – AN OPPORTUNITY FOR AFRICA’S LEADERS TO ASK FOR SOLID COMMITMENTS FROM WESTERN LEADERS ON ILLICIT FINANCIAL FLOWS FROM AFRICA & TAFAWA BALEWA’S OAU SPEECH ON AFRICA

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A joint panel run by the United Nations and the African Union and led by former South African President Thabo Mbeki has discovered that about as much as $60 billion is illegally taken out of Africa annually by companies and government of the developed nations.   According to the report, depriving the world’s poorest continent of capital and tax revenue that could spur faster economic growth is one of the reasons for Africa’s stunted growth.  The Report that the methods some companies use to send money out of the continent illicitly is disturbing and says further that: ‘’The losses are staggering not only in terms of foreign currency involved,  but development opportunities lost. Mbeki, Chairman of the High Panel that examined this problem disclosed that:  “We are talking about large volumes of capital that could play a great role in addressing Africa’s development challenges,” he said in an interview with Wall Street Journal. The scams range from loggers in Mozambique understating the value of the timber to Nigerian officials who send abroad suitcases of illegally earned cash. The panel estimated illicit outflows in part by adding up discrepancies between the reported value of African exports and the higher value those same goods sometimes receive when they arrive as imports to Africa’s trading partners. That investigation showed that most African governments were victims of companies or officials secreting profits and cash out of countries. Mr. Mbeki said he couldn’t name particular companies that may be at fault because their dealings with tax authorities are confidential. But he did say “large commercial corporations are by far the biggest culprits of illicit outflows, followed by organized crime.” The Wall Street Journal wrote that: ‘’the problem isn’t unique to Africa. Taken together, about US$ 1trillion was lost to illicit channels in 2012, according to the Washington-based research and advocacy group Global Financial Integrity. But economists say Africa suffers most because its governments lack the institutions and expertise to spot and stop capital flight. In some countries, regulation is too decentralized—Nigeria alone has 12 agencies with some responsibility for stemming illicit flows— offering wide regulatory and enforcement cracks for those who want to exploit them. It continued: And Africa’s 54 countries have little capacity to exchange information or help each other pursue potential tax dodgers. “There should be an automatic exchange of tax information among African countries,” the report concludes. The loss of capital is particularly…

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